When it is piloted in the first quarter of 1997, it will be the world's first system to combine the EMV compatible integrated chip card with the benefits of shopping in the world of electronic commerce. The project will be administered by Toshiba and Visa in a consortium which will include the Daiei Group, Japan's largest retailer and the Hankyu Toho Group, a diversified entertainment, retail and transportation group.

The ambitious project will enable consumers to use the same card to pay for goods they have found browsing on the Internet, as they do when they visit their local department store. Consumers will no longer need to visit different shopping malls to review the very latest in international fashion, instead they will be able to visit the fashion houses of the world in cyberspace and pay for their purchases using the same Visa card.

Currently, the greatest obstacle to the advancement of the electronic commerce market place is the lack of security for financial transactions over open networks, such as the Internet. Toshiba and Visa will be working to develop hardware applications to facilitate secure payment over the Internet and when the pilot commences in the first quarter of 1997 it is expected that there will already be a common standard in place.

The chip card will be developed according to EMV(Europay, MasterCard and Visa) specifications, so that it is compatible with other EMV systems being developed worldwide and will feature Visa's latest card function - reloadable stored value. Cardholders will be able to use their card for small value transactions as well as the usual credit and debit transactions.

Toshiba will provide the system integration, from the EMV compatible chip card and related devices to back-end servers. It will also develop the system for EMV chip transactions over the Internet, as well as the Sun Microsystems' Java based interface software between the EMV chip card and the transaction system.

Masaichi Koga, Executive Vice President and Director, Toshiba said, "We have worked with Visa in developing integrated chip cards for over ten years. We believe that now is the ideal time to introduce a system that combines the convenience and ease of use with chip cards with the growing potential of cyberspace. With the new system, it will be possible to do business anywhere and everywhere, in both large and small transaction amounts. We believe that the world of electronic commerce has enormous potential. We hope this pilot will establish a global standard platform for electronic commerce and open up exciting new business opportunities."

Commenting on the pilot Lindsay C. Pyne, president, Visa International Asia-Pacific said, "We believe consumers will embrace the concept of using their Visa card to carry out transactions in an electronic environment and within a few years we expect that this method of' payment will be as commonly used as the traditional Visa credit card product"

Mr Pyne added. "The Smart Commerce Japan project is particularly exciting as it offers consumers the convenience of using the one card to go shopping in their nearby mall or in a mall in cyberspace. We are confident that the project will make a significant contribution to the development of a standard global platform for electronic commerce." During the pilot a number of payment methods, including stored value transactions will be tested in the virtual environment. There will also be experiments to find ways to deliver the convenience of shopping in cyberspace to those who do not own a home PC, such as the construction of 'Virtual Mall Kiosks" Placed in convenient locations. Several credit card issuers, major retailers and Japan's leading banks will be involved in the pilot.

Toshiba will cooperate with Netscape Communications Corporation, the leading Internet related software provider, to develop the Internet Platform for the project.

Consumers will be involved in the year-long pilot which will begin in 1997. The test will involve:

--Distribution of 30,000 EMV chip cards, together with compact stored-value card readers, to current Visa cardholders who have experience using the Internet.

--Installation of EMV chip card re-loading terminals in convenient locations, which will allow cardholders to load monetary value onto the card.

--Distribution of browsing software to Internet users involved in the pilot.

--Construction of virtual-mall kiosk terminals in convenient locations.

--Distribution of EMV chip card reader/writers which enable a cardholder to link their EMV chip card directly to a PC and retail outlets.

Established in 1875, Toshiba is a manufacturer of a wide range of products including information equipment, electronics components, heavy electrical apparatus and consumer products. The company has 190,000 employees worldwide and recorded net sales of US$53.8 billion in the fiscal year ended March 1995.

Visa is the world's largest Payment system. It plays a pivotal role in developing and implementing new technologies that benefit its 20,500 Member financial institutions, as well as businesses, governments and the global economy. Visa's 420 million cards are accepted by more than 12 milllon merchants worldwide. Visa/PLUS is the largest global ATM network with over 253,000 ATMs worldwide. Visa consumer card transactions (credit and debit) totalled more than US$630 billion card sales volume in 1994.